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Maritime Enterprise and Empire

Maritime Enterprise and Empire: Sir William Mackinnon and His Business Network, 1823-1893

J. Forbes Munro
Copyright Date: 2003
Edition: NED - New edition
Published by: Boydell and Brewer,
Pages: 536
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  • Book Info
    Maritime Enterprise and Empire
    Book Description:

    This book explores the nineteenth century roots of globalisation through the activities of the enterprise network created by the Scottish merchant, William Mackinnon. It follows the rise of the family-led business group from its modest origins in Scotland to its transformation into the world's largest maritime and mercantile conglomerate, tracing the history of the various shipping firms within the group - including the British India, Netherlands India and Australasian United companies - and identifies the key factors behind its domination of coastal steamshipping around the Indian Ocean and into the western Pacific. It provides an analysis of the anatomy and dynamics of the enterprise network over time. The book also examines Mackinnon's relationship with the imperial statesman, Sir Henry Bartle Frere, which drew the network into the operations of British "informal imperialism" in the Persian Gulf, Red Sea and East-Central Africa regions, and eventually to its sponsorship of the ill-fated Imperial British East Africa Company. It breaks new ground in identifying the interplay of personal and business considerations behind Mackinnon's participation in the "Scramble for Africa" in its combination of maritime history with business history and imperial history to contribute to the current debate over "gentlemanly capitalism" and British overseas expansion. WINNER OF THE 2004 WADSWORTH PRIZE. JOINT WINNER OF THE 2004 SALTIRE SOCIETY RESEARCH BOOK OF THE YEAR AWARD. J. FORBES MUNRO is emeritus professor of international economic history, University of Glasgow.

    eISBN: 978-1-84615-113-2
    Subjects: Transportation Studies

Table of Contents

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  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. List of Illustrations
    (pp. vii-viii)
  4. Acknowledgements
    (pp. ix-x)
  5. Introduction
    (pp. 1-10)

    On 22 June 1893, Sir William Mackinnon, Baronet of Balinakill and Loup, and Companion of the Indian Empire, died in his personal suite in the Burlington Hotel, just off Bond Street in London’s West End. Some six days later he was buried in the little churchyard of the village of Clachan, in Kintyre in western Scotland. One mourner, Henry Morton Stanley, the African explorer, recorded the scene: ‘We walked from his house, after a simple service in the dining room. . . . The coffin was borne on the shoulders of relays of the Clachan villagers. In the parish grave-yard...

  6. Map
    (pp. 11-12)
  7. Part 1 Enterprising Scots

    • 1 East India merchants: Clyde to Calcutta, 1823–61
      (pp. 15-34)

      In 1861 some seventy British merchant firms were located in the bustling city of Calcutta, on the banks of the Hooghly River in Bengal. These were the agency houses, all private partnerships, which conducted the large trade between Britain and northern India, as well as a substantial part of the commerce within north-east India and between India and neighbouring Asian territories – the so-called ‘country trades’. The Calcutta agency houses, together with their counterparts in Bombay in western India, were the cutting edge of British capitalism in South Asia. Times were good for them. The shock of the Mutiny, which had...

    • 2 The British India Steam Navigation Company, 1856–70
      (pp. 35-68)

      By the middle of the 1850s a transition from sail to steam in maritime transport and communications was underway around the coasts of Europe and North America and on the shorter North Atlantic crossings. However, the steamship built of wood or iron and driven by paddle or screw propeller was still a rare sight in the Indian Ocean and its adjoining seas. Paddle steamers burning wood or coal could be found on the great rivers of western and southern Asia – the Tigris, Indus, Ganges and Irrawaddy – where pioneering investment in the new technology by the East India Company had helped...

    • 3 Extending the system: Australia, Indonesia and Arabian waters, 1862–70
      (pp. 69-87)

      Steamship lines gradually developed across the Indian Ocean maritime region in the course of the 1860s. A handful of shipping companies flourished there with the assistance of government contracts and the shelter provided by the great bulk of the African continent from the more competitive commercial steamshipping conditions to be found European and North Atlantic waters. On the long, deep-sea routes from Suez and Aden to India, Australia and the Far East, the P&O company was pre-eminent. This ‘flagship’ of British imperialism in the East,¹ was joined from 1861 by a French counterpart, Messageries Impériales, whose steamship lines from Marseilles...

    • 4 Business networking, 1860–70
      (pp. 88-118)

      The creation of the British India S.N. Co and the take-over of the Netherlands India S.N. Co were acts of personal and familial business diversification. The partners in the Mackinnon-Hall merchant houses, together with other members of their families, used their profits from mercantile endeavour, as well as financial credit from sources available to them, to take control of the two steamer companies through minority holdings. Of the three family firms, only Wm. Mackinnon & Co held any equity in the steamship concerns – NISM shares worth £2,750 and representing only 12 per cent of its ‘outside’ investments in 1868. Clearly,...

  8. Part 2 Suez and after

    • 5 The Suez Canal, India and the Netherlands Indies, 1869–82
      (pp. 121-153)

      The opening of the Suez Canal in November 1869 was one of the most important landmarks in nineteenth century maritime history. Although it impacted only a little on shipping in northern European or North Atlantic waters, it revolutionised the shipping trades between Europe and Asia and strongly influenced those between Europe and Australasia as well. The Canal considerably shortened distances between European and Asian ports, but did so by a route which was much more favourable to steamships than sailing ships (because of the costs to the latter of towage through the canal, and the fickle nature of the winds...

    • 6 The Persian Gulf, the Zanzibar mail contracts, and the London-Gulf line, 1869–82
      (pp. 154-180)

      The opening of the Suez Canal had a significant impact on the maritime commerce of South and South-east Asia. It also strengthened the European imperial presence in these regions, by speeding up civil and military transport and communications. However, the effects of the Canal were potentially even greater on the northern and western fringes of the Indian Ocean. A great swathe of coastal waters – from Basra at the head of the Persian Gulf, around the shores of the Arabian peninsula to the Red Sea, and from the Red Sea southwards round Cape Gardafui and along the Somali coast to the...

    • 7 Eastern Africa, 1872–82
      (pp. 181-212)

      Along the eastern shoreline of Africa, as in the Red Sea and the Persian Gulf, William Mackinnon, BI and Gray Dawes & Co spent much of the 1870s in trade-promoting activities – running steamships to a regular timetable, setting-up local agencies, attempting to develop interior lines of communication, and trying to secure British consular support for these pursuits. However, these African margins of BI’s ‘Arabian’ system possessed their own distinguishing characteristics. In particular, the group’s operations on eastern African shores acquired a philanthropic or humanitarian dimension – in which goals of opening up the foreign trade of less developed regions, and incorporating...

    • 8 ‘Aristocratic capitalism’, railways and the Central African project, 1876–82
      (pp. 213-233)

      Personal and familial networking could be a significant tool for creating and expanding a business organisation. It was used during the 1860s to create the Mackinnon group’s Indian and Indonesian steamship enterprises, and in the 1870s to expand these operations into the coastal waters of the Red Sea and Eastern Africa as well as to initiate a steamship line between Britain and India. The group also called on its outer circle of friends and allies in a more moderate way to finance and support its on-going diversification into transport, manufacturing and tea planting within India (Chapter 9). However, the motives...

    • 9 Family, group and network, 1870–82
      (pp. 234-252)

      The very substantial growth in their steamshipping interests during the 1870s had consequences for the family firms within the business group and for the enterprise network to which William Mackinnon provided leadership. Not all were affected equally, or in the same way, but none could avoid the pressures unleashed by the shipping revolution east of Suez or ignore the new commercial opportunities that emerged. Reactions and responses to such forces, however, were also interwoven with other factors. Family demographics meant that those in charge of the older houses in Glasgow, Liverpool and Calcutta were ageing, so that issues of retirement...

    • 10 The failure of the City of Glasgow Bank, 1878–82
      (pp. 253-278)

      In the late afternoon of 1 October 1878 the City of Glasgow Bank closed its doors against further business. The fact that the Bank was in trouble, and would have to cease trading, had been known only to its management – plus a few senior officers of the major Edinburgh-based banks, who had been called in to assist but decided that matters within the Glasgow institution had gone too far for any rescue package. The news of the Bank’s demise therefore came suddenly and caught the general public by surprise. The next day, a curious crowd gathered outside its head offices...

  9. Part 3 Shipping power and imperial rivalries

    • 11 The Australian opening, 1880–93
      (pp. 281-308)

      During the early months of 1880, Thomas McIlwraith, the new Premier (first minister) of Queensland, was in London to promote the interests of his colonial government. McIlwraith, who came originally from Ayr in southwest Scotland, had abandoned his studies at Glasgow University in 1854 to join the great exodus from Scotland to the goldfields of Australia. He subsequently became a railway engineer and contractor, and a pastoralist. His investments in sheep runs eventually focused on properties in Queensland, where he also involved himself in cattle ranching. McIlwraith, a colourful, ebullient and pugnacious character, was elected to the Queensland legislature in...

    • 12 India: competition, collaboration and consolidation, 1882–93
      (pp. 309-326)

      The Mackinnon group’s entry into Australian shipping and other business ventures began during the upswing in the business cycle that took place between 1879 and 1882, and was in many respects the last phase in a diversification of shipping interests started by the opening of the Suez Canal. However, the Australian initiative was fairly quickly overtaken by a transformation in the international economic environment that had commenced in the mid-1870s but was most pronounced in the years between 1882 and 1896. Decelerating economic growth in Britain, reflected in turn in a slowdown in its trade with foreign countries and imperial...

    • 13 Indonesia: nationalism in Dutch colonial policy, 1882–90
      (pp. 327-345)

      One reason for William Mackinnon’s distraction from Indian business affairs after 1884–5 was the necessity of having to cope with a serious challenge to the future prospects of the Netherlands India S.N. Co (NISM) within the Indonesian archipelago. His great achievement in creating the Australasian United S.N. Co in 1886–7 meant that the Mackinnon group now dominated steamshipping in coastal waters throughout the great swathe of territory comprising India, Indonesia and Australia, and it had become the world’s largest maritime conglomerate. However, pleasure in that accomplishment was short-lived, and much gloss taken off the triumph, by the fact...

    • 14 Imperial politics: Egypt and the scramble for Africa, 1882–6
      (pp. 346-381)

      In the spring of 1882, with the tribulations of the City of Glasgow Bank behind him, William Mackinnon returned to London determined to pick up the threads of various affairs that he had been compelled to set aside, and to play an active part again in the business and political life of the metropolis. He arrived back at an interesting moment. Gladstone’s Liberal government was already struggling with the two great issues – relations with Ireland and with Egypt – that would directly or indirectly dominate much of British politics in the 1880s. Of the two, Egypt had the greater relevance for...

    • 15 Interludes: a Scottish election, an African expedition and a Persian railway, 1885–7
      (pp. 382-407)

      The mid-1880s were a time of uncertainty and hesitancy in the affairs of the Mackinnon group. Although it was successfully consolidating its position as the dominant force in the coastal steamshipping of India and Australia, it was beginning to face a strong challenge to its position in Indonesia and its long-distance lines between Britain and India were in the grip of depression. Meanwhile, on the peripheries of its sphere of operations – in the Persian Gulf and eastern Africa – there was commercial stalemate. Trade was flat, profits were slack, and transport innovation had stalled. Overall, it was difficult to see where...

    • 16 A false dawn: East Africa and the western Indian Ocean, 1887–90
      (pp. 408-450)

      The Imperial British East Africa Company, with William Mackinnon as President of its Court of Directors, obtained a royal charter from Queen Victoria in September 1888. It was one of three chartered companies established with support from British governments which were reluctant to spend money in acquiring new colonial possessions in Tropical Africa, but which were equally reluctant to leave the field entirely to other European powers and therefore encouraged private enterprise to take up the task of acquiring and administering new territory in the name of the Crown. The Imperial British East Africa Company was the weakest of the...

    • 17 The fall of the Imperial British East Africa Company, 1890–3
      (pp. 451-482)

      By November 1890, very little progress had been made with the three business objectives associated with the Imperial British East Africa Co. On the coast, a limited amount of infrastructural investment was underway – in telegraph lines, harbour facilities, roads, river surveys and local steamshipping – but it had not yet stimulated new economic activity or generated much in the way of additional trade revenues from which the Company could draw an income. That would be a task of several years. Nor had the Company embarked on the programme of Indian immigration which was to be the cornerstone of its development policy...

  10. Conclusion

    • 18 Maritime enterprise and empire
      (pp. 485-511)

      William Mackinnon’s business career spanned most of the second half of the nineteenth century. It extended from the repeal of the Corn Laws and the Navigation Acts, which finally converted Britain and its overseas possessions into one large free-trade zone, open to international trade and investment, to the advent of the ‘New Imperialism’, when apprehension arose about British industrial and military/naval power being surpassed by Germany and the USA and the first doubts began to appear about the continuing usefulness of free-trade policies. The second half of the century was also a period when, despite the disappearance of earlier mercantilist...

  11. Appendix: family trees
    (pp. 512-514)
  12. Sources
    (pp. 515-516)
  13. Index
    (pp. 517-525)
  14. Back Matter
    (pp. 526-526)